Analysis: Cost of living on travel nurse assignments

Cost consciousness

We are living in a time of cost consciousness when accounting for every dollar earned and spent is not just prudent, but practically a necessity. But it also could be a prime time to embrace the mobile lifestyle. Why? Well, not only do travelers have the potential to earn greater hourly pay rates than permanent staff, but perks such as company-provided housing add to the financial rewards of this career choice. Still, there are a few fiscal factors to consider before agreeing to your next assignment. Read on to learn how you can make the most out of each contract—financially speaking, that is.

Paying dues

Before Verona Barrows, RN, packs her suitcases and sets off for a new contract, she carefully evaluates her earning power, everything from hourly pay to travel reimbursements and tax withholdings. "I always look at my net income prior to accepting an assignment to make sure it is worthwhile for me to leave my home for a minimum of three months," she asserts. The neonatal intensive care unit (NICU) nurse usually partners with Greenwood Village, Colorado-based Fastaff, and accepts assignments approximately eight months out of the year. "I like to wait for an opportunity that interests me," she adds.

How profitable your paycheck ends up being depends on more than just your compensation. Rather, extenuating factors influence how far your cash will stretch, such as food costs, gas prices, and other disposable spending—purchases that are fluid and not fixed or preset, like car or mortgage payments.

Then you must account for state income taxes. Generally speaking, you pay the fee for the state where you are assigned, and then apply that to your home state requirements. Some states do not impose any income tax, which immediately puts more dollars in your pocket, but watch out because your state of residency may tax those earnings. "Contracts in income-tax-free states are attractive to some travelers who use the lifestyle to maximize their salaries," says Janet Harvey, a recruiter with Cross Country TravCorps, headquartered in Boca Raton, Florida. "I always advise nurses to consult with a qualified tax adviser first to make sure there are no surprises come tax-filing time."

Location, location, location

All these expenses—along with things like local sales taxes, interest rates, and the Consumer Price Index, an inflation-measuring tool—combine to determine a community's cost-of-living index (COLI). However, this is not a constant gauge you can uniformly apply from one location to another. Instead, it differs by city, state, and region.

"We are seeing less consistency in terms of cost of living than we were five years ago," says Craig Wolf, vice president and general manager of Aureus Medical Group, a healthcare staffing company located in Omaha, Nebraska. "In fact, there can be dramatic fluctuations month to month within the same location."

Of course, there are some predictable patterns. "Heavy tourist areas on either coast generally fall at the higher end of the index," Wolf says. "The most expensive cities have traditionally been New York, Boston, Los Angeles, San Francisco, Seattle, and even parts of San Diego," Harvey adds.

According to the Council for Community and Economic Research's ACCRA Cost of Living Index, some of the most expensive states to live and work in are Alaska, Hawaii, California, and New York. Balancing out the lower end of the scale are Kansas, Texas, Tennessee, Oklahoma, and Missouri. "I probably did save more while on my assignment in Missouri than I did in California," Barrows admits. "On the other hand, I was able to afford to take a few cruises while on the West Coast because I did not have to pay for airfare."

Previously, travelers may have had a wish list of destinations they would like to experience regardless of its COLI. Within the past few months, though, circumstances have shifted somewhat. "More and more, travelers are looking at the big picture and weighing all aspects of an opportunity," Wolf says. "We have had some practitioners turn down contracts because they are located in high cost-of-living areas. They simply did not want to incur those expenses at this time."